A:

The distributions are different for IRAs, qualified plans and 403(b) plans.

For IRAs, qualified plans (such as 401(k), money purchase and profit sharing plan), and 403(b) plans, distributions that occur before the participant reaches age 59.5 are subject to the 10% excise tax (early-distribution penalty) unless the participant meets an exception. The lists of exceptions for each of the different plans share some similarities, but there are some differences as well.

Distributions from IRAs are left to the discretion of the IRA owner and can occur at any time. For qualified plans and 403(b) plans, the participant must meet at least one of a list of requirements before he/she can receive distributions from the plan.

For the list of exceptions for IRA distributions, see our IRA tutorial. Also see our tutorials on qualified plans and on 403(b) plans - each one devotes an entire section to distributions.

This question was answered by Denise Appleby
(
Contact Denise)

RELATED FAQS
  1. I am a teacher in a public school system and I don't presently have a 403(b) plan, ...

    If you establish a 403(b) account under the school's 403(b) plan, you may roll the Traditional IRA assets to the 403(b) account. ... Read Answer >>
  2. What is the difference between a 401(k) plan and a 403(b) plan?

    Administered by for-profit, private companies, 401(k) plans are more common than the nonprofit or government-sponsored 4 ... Read Answer >>
Related Articles
  1. Financial Advisor

    The 4-1-1 on 403(b) Plans

    These plans resemble 401(k) plans in many respects, but are specially designed for nonprofit entities.
  2. Retirement

    Top 9 Benefits Of A 403(b) Plan

    A 403(b) plan is a tax-sheltered retirement plan for employees of many non-profit entities, including public safety and educational organizations.
  3. Retirement

    Top 9 Benefits Of A 403(b) Plan

    Find out how the 403(b) plan helps employees of nonprofit entities meet their retirement goals.
  4. Financial Advisor

    Advising FAs: Explaining Estate Planning to a Client

    As the old saying goes, you can't take it with you. For this reason, it is important to have a current estate plan in place to protect your family and belongings.
  5. Financial Advisor

    457 Plans and 403(b) Plans: A Comparison

    There's plenty of advice about 401(k) plans, but what about 457 and 403(b) plans?
  6. Retirement

    How a 403(b) Works After Retirement

    Everything you need to know (don't be afraid to ask) about handling your 403(b) plan when you retire.
  7. Retirement

    Got a 403(b) Plan? Here's What You Need to Know

    Many folks do not understand the ins and outs of their 403(b) plan. Let's change that.
  8. Retirement

    3 Retirement Plan Moves To Make Before Year-End

    If you don't know what must be done before December 31 you may miss opportunities - or even pay penalties.
  9. Retirement

    The Basics of a 401(k) Retirement Plan

    This plan has become one of the most popular retirement options. Here's why.
  10. Retirement

    Avoid the Most Common IRA Rollover Mistakes

    Avoid paying excess taxes by learning some simple transfer rules.
RELATED TERMS
  1. Direct Rollover

    A distribution of eligible rollover assets from a qualified plan, ...
  2. Eligible Rollover Distribution

    A distribution from an IRA, qualified plan, 403(b) plan or 457 ...
  3. IRS Publication 571: Tax-Sheltered Annuity Plans (403(b) Plans) For Employees of ...

    A document published by the Internal Revenue Service (IRS) that ...
  4. Active Participant Status

    Active-participant status is a reference to an individual's participation ...
  5. Non-Qualified Distribution

    1) A distribution from a Roth IRA that occurs before the Roth ...
  6. IRA Plan

    A plan that individuals may establish to arrange and plan for ...
Hot Definitions
  1. Davos World Economic Forum

    The annual meeting of the World Economic Forum hosted at Davos—a small ski town in Switzerland—in January each year is among ...
  2. Smart Home

    A convenient home setup where appliances and devices can be automatically controlled remotely from anywhere in the world ...
  3. Efficient Frontier

    A set of optimal portfolios that offers the highest expected return for a defined level of risk or the lowest risk for a ...
  4. Basis Point (BPS)

    A unit that is equal to 1/100th of 1%, and is used to denote the change in a financial instrument. The basis point is commonly ...
  5. Initial Public Offering - IPO

    The first sale of stock by a private company to the public. IPOs are often issued by smaller, younger companies seeking the ...
  6. Border Adjustment Tax

    A tax levied on goods based on where they are sold – exported goods are exempt from tax; those imported and sold in the ...
Trading Center